Nvidia CEO Huang expects AI-generated movies to drive extra demand for its chips By Reuters

By Stephen Nellis and Arsheeya Bajwa

(Reuters) – For chip designer Nvidia (NASDAQ:), the generative synthetic intelligence increase is the reward that retains on giving.

After using a requirement surge sparked by Huge Tech’s rush to roll out chatbots, Nvidia now expects new AI fashions which can be able to creating video and fascinating in human-like voice interactions to spur extra orders for its graphics processors.

“There’s loads of info in life that needs to be grounded by video, grounded by physics. In order that’s the subsequent huge factor,” Nvidia CEO Jensen Huang informed Reuters on Wednesday.

“You’ve got bought 3D video and you have got a complete bunch of stuff you are studying from. So these methods are going to be fairly giant.”

The necessity for extra computing energy to coach and run superior AI methods has buoyed demand for Nvidia’s Grace Hopper chips such because the H200, which was first utilized in OpenAI’s GPT-4o – a multimodal mannequin able to sensible voice dialog with the flexibility to work together throughout textual content and picture.

Nvidia’s different clients, together with Google (NASDAQ:) DeepMind and Meta Platforms (NASDAQ:), have additionally launched AI picture or video era platforms.

The chipmaker on Wednesday forecast quarterly income far above estimates, after clocking greater than five-fold development in gross sales at its information middle unit within the first quarter.

“The demand is broad primarily based and the massive language fashions have to be more and more multimodal, understanding not simply video but in addition textual content, speech, 2D and 3D photographs,” mentioned Derren Nathan, the pinnacle of fairness evaluation at Hargreaves Lansdown.

AI fashions for video used within the automotive business are additionally rising as a giant driver of demand for Nvidia chips.

Tesla (NASDAQ:) has expanded its cluster of processors utilized in AI coaching to about 35,000 H100s because it chases autonomous driving, Nvidia’s finance chief Colette Kress mentioned on a post-earnings name on Wednesday.

Kress added that the automotive business was anticipated to be the biggest enterprise vertical in Nvidia’s information middle enterprise this yr.

“It (video era) is actually one of many sturdy and already confirmed use instances for AI and it’s extending past simply content material manufacturing,” Hargreaves Lansdown’s Nathan mentioned.